Techcombank has signed a cooperative agreement with Asian Development Bank (ADB) to together cooperate to support foreign trade activities of Vietnamese import and export businesses, especially non-state small and medium-size enterprises. This agreement has brought Techcombank to become one of the first five banks in the world that have signed and undergone this kind of contract with the ADB.
Under the agreement on the Trade Finance Facilitation Programme (TFFP) aiming to develop and enhance the capability of local banks to provide trade finance products to private sector importers and exporters to facilitate international trade, ADB will directly help ensure Techcombank the payment of Letter of Credit of local import and export businesses.
Accordingly, businesses are the clients of Techcombank can be guaranteed to pay up to 80% of L/C value with low costs by the ADB when they make any banking transactions with foreign banks. On the other hand, the guaranteeing cost will also be reduced respectively and bring back real advantages for Techcombank’s clients and their partners abroad.
At present, Techcombank signed agreements with tens of the world’s leading banks on confirming L/Cs for its clients totalling amounting to tens of millions of US dollars.
ADB also has offered short-terms loans to Techcombank’s clients with the preference interest rate to help finance export-import purposes with partners who have the headquarter in the places where there are ADB’s members located.
On November 12, Techcombank carried out the first disbursement to the hard currency borrowing requirements of its private sector exporter and importer clients amounting to US$3 million.
Techcombank and ADB also have committed to continuously prolong the term limit of loans and continue to increase the term loan to Techcombank up to 50% of its chartered capital.
Some other credit contracts also are being considered by the both sides such as the cooperation in “lending to clients at their home” in Vietnam or ADB will help ensure Techcombank to issue valuable papers on the international financial markets.
According to banking and finance specialists, because Techcombank is a young joint stock bank on the international market with clients that are mainly private businesses, so at some credit markets of Techcombank, the bank still must be confirmed by a large international bank. Therefore, Techcombank’s implementation of agreements with ADB not only creates big advantages and conveniences for local export and import businesses to promote to expand its export market but also improve prestige and reputation of Vietnamese joint stock banks on the international financial markets.